DailyPlay – Opening Trade (WMT) & Closing Trade (ADBE) – June 18, 2025

Closing Trade

• ADBE – 112% loss: Buy to Close 3 Contracts (or 100% of your Contracts) July 03 $410/$400 Put Vertical Spreads @ $8.80 Debit. 
  DailyPlay Portfolio:  By Closing 3 Contracts, we will be paying $2,640. We initially opened these 3 contracts on June 04 @ $4.15 Credit. Our loss, therefore, is $465 per contract.

WMT Bearish Opening Trade Signal

Investment Rationale

Investment Thesis:
Walmart (WMT) appears increasingly vulnerable to downside pressure following a rejection at key technical resistance and signs of overvaluation relative to its industry peers. While the retail giant continues to benefit from its defensive profile, current valuation levels and modest growth metrics do not support the prevailing premium. In a market environment increasingly sensitive to valuation and earnings quality, WMT may underperform as investors reassess risk-adjusted expectations heading into Q3. With weakening momentum and limited upside catalysts, a bearish stance is justified as the stock struggles to hold key support.

Technical Analysis:
WMT was recently rejected at the $100 level, a significant area of resistance that has capped price rallies since late 2024. The stock has since broken below its 20-day moving average and is hovering just above the 50-day, with price action showing a potential transition from consolidation to a new downtrend. The RSI sits around neutral territory, but the lack of strong buying support on recent pullbacks suggests diminishing bullish conviction. A breakdown below $91 would likely accelerate downside momentum toward its longer-term moving averages and volume support levels.

Fundamental Analysis:
Walmart trades at a meaningful valuation premium despite performance metrics that are largely in line with industry averages. This disconnect highlights the risk of multiple compression should market sentiment deteriorate or growth expectations reset lower.

• Forward PE Ratio: 36.23x vs. Industry Median 17.96x
  
• Expected EPS Growth: 8.99% vs. Industry Median 9.02%
  
• Expected Revenue Growth: 4.19% vs. Industry Median 4.98%
  
• Net Margins: 2.75% vs. Industry Median 2.36%
  

Options Trade:
Sell the WMT Aug 1, 2025, 95/101 bear call vertical spread for a net credit. This bearish position reaches maximum profit if WMT closes below $95 at expiration. The structure presents an attractive 0.56 risk/reward profile and benefits from both time decay and bearish price action. With shares currently near $94.25, the spread is strategically placed just above resistance, offering a high-probability setup if WMT continues to stall or weaken.

WMT – Daily

Trade Details

Strategy Details

Strategy: Short Call Vertical Spread

Direction: Bearish Credit Spread

Details: Sell to Open 5 WMT Aug 01 $95/$101 Call Vertical Spreads @ $2.16 Credit per Contract.

Total Risk: This trade has a max risk of $1,920 (5 Contracts x $384) based on a hypothetical $100k portfolio risking 2%. We suggest risking only 2% of the value of your portfolio and divide it by $384 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bearish trade on a stock that is expected to continue lower over the duration of this trade.

1M/6M Trends: Bearish/Neutral

Relative Strength: 4/10

OptionsPlay Score: 101

Stop Loss: @ $4.32 (100% loss to value of premium)

View WMT Trade

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that whenever there is a multi-leg option strategy, it should be entered as a single trade. 

PLEASE NOTE that these prices are based on Tuesday’s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry. 

View WMT Trade